2020/2263(INI) Implementation of the 6th VAT Directive: what is the missing part to reduce the EU VAT gap?
Next event: Debate in plenary scheduled 2022/02/14
Lead committee dossier:
Next event: Debate in plenary scheduled 2022/02/14
Progress: Awaiting Parliament's vote
| Role | Committee | Rapporteur | Shadows |
|---|---|---|---|
| Lead | ECON |
CHASTEL Olivier ( Renew)
|
PEREIRA Lídia ( EPP),
SANT Alfred ( S&D),
PETER-HANSEN Kira Marie ( Verts/ALE),
BECK Gunnar ( ID),
JURZYCA Eugen ( ECR),
SCHIRDEWAN Martin ( GUE/NGL)
|
Lead committee dossier:
Legal Basis:
RoP 54
Legal Basis:
RoP 54Events
2022/02/14
Debate in plenary scheduled
2021/12/20
EP - Committee report tabled for plenary
Details
The Committee on Economic and Monetary Affairs adopted the own-initiative report by Olivier CHASTEL (Renew Europe, BE) on the implementation of the Sixth VAT Directive: what is the missing part to reduce the EU VAT gap?
In 1977, the Council adopted the Sixth VAT Directive with a view to achieving a uniform tax base under which harmonised rates were to be set out. The aim was to abolish fiscal borders and controls at internal borders for all operations carried out between Member States with a view to the completion of the internal market on 31 December 1992.
The VAT Directive has recast and repealed the Sixth VAT Directive, for the purposes of greater clarification. The Directive provides for the transitional rules to be replaced by a definitive system based on taxation in the Member State of origin. However, the transitional system is complex, flawed and structurally vulnerable to fraud. This report also analyses the VAT gap between Member States.
Tax rates, tax bases and VAT gaps in Member States
The VAT gap is the difference between expected VAT revenues and VAT actually collected. VAT revenue is one of the chief sources of public revenue, accounting for some 21 % of total tax revenue in the EU on average. Members welcomed the fact that the overall trend is positive , with the VAT gap falling to 10 % in 2019 from 20 % in 2009 in the Member States, which suggests that VAT fraud in the EU is in decline and VAT revenue as a proportion of gross domestic product is on the rise.
The report called on national tax authorities to take initiatives to reduce the VAT gap in order to improve public finances, especially in the light of the economic downturn caused by the COVID-19 pandemic and increase EU own resources.
Members stressed that the system is becoming increasingly complicated because of the different rates, but also because of exemptions and derogations. The COVID-19 pandemic justified VAT-related exception rules, which proves the need for a degree of flexibility when facing urgent or unexpected circumstances.
Impact of the wide variety of reduced rates on businesses
The current diversity of reduced rates creates additional administrative burdens for businesses with the total cost of VAT compliance ranging from 1 % to 4 % of company turnover within the Member States. Digitalisation can contribute greatly to the reduction of compliance costs for businesses. While digitisation can help cut costs, it imposes a burden in the short term on businesses, and particularly SMEs , as they must acquire the latest technology and know-how. Looking ahead, the Member States will need a harmonised IT system.
Members also support the idea of expanding the scope of the VAT One-Stop Shop , which has been in place since 2015, to the declaration and payment of VAT. More specifically, they underlined the need to specifically target the adaptation of the One-Stop Shop at the expanding e-commerce market.
Moreover, Members called for the expansion of e-invoicing and for the introduction of an EU e-invoicing standard harmonising, in particular, the information contained in an e-invoice in order to facilitate cross-border interoperability, ensure legal compliance, increase transparency in commercial transactions and thus limit fraud and errors.
The report underlined the urgency of tackling VAT cross-border fraud and carousel fraud through the proper implementation of efficient exchange of information mechanisms and adequate means (both human, financial, technical and technological) for national authorities and other authorities such as OLAF. Companies need simplified and centralised access to information on rates, the correct VAT rates for different goods and services in the different Member States, and the conditions for zero-rate VAT, as well as and clear and unambiguous VAT rules to encourage cross-border business and reduce their administrative burdens.
Impact of reduced VAT rates on consumers and social and environmental objectives
Reduced rates normally pursue the legitimate purpose of ensuring that essential goods are accessible to everyone. They can be more effective in societies with significant income disparities and a high level of social and economic inequality. The report noted that in order to promote environmentally friendly consumption, it is of primary importance for Member States to phase out all zero VAT rates and reduced rates for harmful environmental goods and services. Evidence suggests that reduced VAT rates are often a rather inefficient instrument to achieve social or environmental objectives since they lead to considerable costs for governments owing to the size of the rate gap, reduced tax revenues, increased administrative costs, costly checks and inspections, pressure from social and economic representatives compliance costs, economic distortions or even tax evasion, and difficulties in reaching target groups.
The Commission and the Member States are called on to explore all the possibilities of the taxpayer identification number as a mechanism to safeguard high efficiency standards for reporting.
Stressing the importance of guaranteeing the full transposition and proper implementation of the VAT e-commerce package, Members called on the Commission to evaluate the state of play in this regard and present concrete proposals to adapt the rules, where needed, taking the exponential growth of e-commerce into consideration.
Lastly, the report stressed the need to move to a definitive VAT system based on the principle of taxation in the country of destination. It called on the Council to adopt the proposal for a directive of 25 May 2018 as soon as possible, given the extent of the loss of national and EU budgetary resources under the current regime.
Documents
2021/12/06
EP - Vote in committee
2021/10/21
EP - Amendments tabled in committee
Documents
2021/09/06
EP - Committee draft report
Documents
2020/12/17
EP - Committee referral announced in Parliament
2020/10/28
EP - CHASTEL Olivier (Renew) appointed as rapporteur in ECON
Documents
- Committee report tabled for plenary: A9-0355/2021
- Amendments tabled in committee: PE697.828
- Committee draft report: PE662.096
- Committee draft report: PE662.096
- Amendments tabled in committee: PE697.828
Activities
- Olivier CHASTEL
Plenary Speeches (0)
- Katarina BARLEY
Plenary Speeches (0)
| Amendments | Dossier |
| 160 |
2020/2263(INI)
2021/10/21
ECON
160 amendments...
Amendment 1 #
Motion for a resolution Citation 2 — having regard to Articles 113
Amendment 10 #
Motion for a resolution Recital E a (new) E a. whereas this loss is detrimental both for the EU budget (VAT is the EU's second own resource), for national budgets, for business and for European citizens;
Amendment 100 #
Motion for a resolution Paragraph 13 13. Takes the view that direct tax measures, such as progressive personal income tax rates and carbon taxes and incentives, such as direct grants or tax credits targeting specific consumers and producers, are more effective, flexible, visible and cost-effective tools for achieving these social and environmental objectives;
Amendment 101 #
Motion for a resolution Paragraph 13 13. Takes the view that direct tax incentives, such as direct grants or tax credits targeting specific consumers and producers,
Amendment 102 #
Motion for a resolution Paragraph 13 13. Takes the view that direct tax incentives, such as direct grants or tax credits targeting specific consumers and producers,
Amendment 103 #
Motion for a resolution Paragraph 13 13. Takes the view that direct tax incentives, such as direct grants or tax credits targeting specific consumers and producers,
Amendment 104 #
Motion for a resolution Paragraph 14 14. Stresses that a uniform VAT
Amendment 105 #
Motion for a resolution Paragraph 14 14.
Amendment 106 #
Motion for a resolution Paragraph 14 14. Stresses that a uniform VAT system,
Amendment 107 #
Motion for a resolution Paragraph 14 14.
Amendment 108 #
Motion for a resolution Paragraph 14 14. Stresses that a uniform VAT system, combined with a direct tax incentive tool such as the income-based tax credit scheme for low-income households, together with a raft of social reforms,
Amendment 109 #
Motion for a resolution Paragraph 14 a (new) 14a. Believes that rationalisation designed to achieve a uniform VAT system must at the same time take into account the historical application of reduced rates targeted at strategic sectors; stresses in this connection, the importance of appropriate tax treatment for equestrian and equine activities in the broad sense;
Amendment 11 #
Motion for a resolution Recital E b (new) E b. whereas the Fiscalis program for the period 2021-2027, with a budget of EUR 269 million, aims to fight tax injustice by helping national tax authorities to cooperate better to combat tax fraud, tax evasion and aggressive tax planning; whereas the previous program brought in EUR 591 million in revenue for the EU;
Amendment 110 #
Motion for a resolution Paragraph 15 15. Recalls that VAT revenue is one of the chief sources of public revenue, accounting for some 21% of total tax revenue in the EU on average; that the VAT gap stands at 10% on average; and that VAT also constitutes an own resource for the EU budget; stresses that any reduction in the VAT base may lead
Amendment 111 #
Motion for a resolution Paragraph 15 15. Recalls that VAT revenue is one of the chief sources of public revenue, accounting for some 21% of total tax revenue in the EU on average; that the VAT gap stands at 10% on average; and that VAT also constitutes an own resource for the EU budget;
Amendment 112 #
Motion for a resolution Paragraph 15 15. Recalls that VAT revenue is one of the chief sources of public revenue, accounting for some 21% of total tax revenue in the EU on average; that the VAT gap stands at 10% on average; and that VAT also constitutes an own resource for the EU budget; stresses that any reduction in the VAT base leads to less revenue for public finances; calls on national tax authorities to take initiatives to reduce the VAT gap in order to help lift Member States out of the current socio- economic crisis and to the benefit of EU own resources;
Amendment 113 #
Motion for a resolution Paragraph 15 15. Recalls that VAT revenue is one of the chief sources of public revenue, accounting for some 21% of total tax revenue in the EU on average; that the VAT gap stands at 10% on average; and that VAT also constitutes an own resource for the EU budget; stresses that any reduction in the VAT base leads to less revenue for public finances; calls on national tax authorities to take initiatives to reduce the VAT gap in order to
Amendment 114 #
Motion for a resolution Paragraph 15 a (new) 15 a. Welcomes in this regard that major progress has been achieved on cooperation between the tax authorities of the Member States over the last decade; supports further discussions among Member States in order to strengthen the administrative cooperation;
Amendment 115 #
Motion for a resolution Paragraph 16 16. Endorses the findings of the DIW Econ study which stresses that on average the standard rate was applied to 71% of the total tax base in the Member States in 2019;
Amendment 116 #
Motion for a resolution Paragraph 16 16.
Amendment 117 #
Motion for a resolution Paragraph 16 16. Endorses the findings of the DIW Econ study which stresses that on average the standard rate was applied to 71% of the total tax base in the Member States in 2019; points out that diversified VAT systems impose costs on businesses, particularly SMEs via increased compliance costs, create distortions in the internal market and trade, and incur costs on government through lost revenue;
Amendment 118 #
Motion for a resolution Paragraph 16 16.
Amendment 119 #
Motion for a resolution Paragraph 16 16. Endorses the findings of the DIW Econ study which stresses that on average the standard rate was applied to 71% of the total tax base in the Member States in 2019;
Amendment 12 #
Motion for a resolution Recital E b (new) E b. whereas the Parliament fully respects the principle of national tax sovereignty;
Amendment 120 #
Motion for a resolution Paragraph 16 a (new) 16 a. Calls for the assessment and adjustment of distorting and environmentally harmful reduced rates;
Amendment 121 #
Motion for a resolution Paragraph 17 17.
Amendment 122 #
Motion for a resolution Paragraph 17 17. Notes the difficulties in reducing the VAT gap between Member States owing to the need to maintain a number of VAT exemptions for certain goods and services and the willingness of Member States to maintain reduced rates of at least 5%; acknowledges that Member States need to conserve the flexibility to set their own VAT rates given the importance of this tax as a budgetary instrument; calls on the Commission to map all the different tax mixes between Member States to better understand the distortive nature of uncoordinated and unharmonised taxsystems;
Amendment 123 #
Motion for a resolution Paragraph 17 17. Notes the difficulties in reducing the VAT gap between Member States owing
Amendment 124 #
Motion for a resolution Paragraph 17 17. Notes the difficulties in reducing the VAT gap between Member States owing to the justified need to maintain a number of VAT exemptions for certain goods and services and the willingness of Member States to maintain reduced rates of at least 5%; acknowledges that Member States need to conserve the flexibility to set their own VAT rates given the importance of this tax as a
Amendment 125 #
Motion for a resolution Paragraph 17 17. Notes the difficulties in reducing the VAT gap between Member States owing to the need to maintain a number of VAT exemptions for certain goods and services and the willingness of Member States to maintain reduced rates of at least
Amendment 126 #
17 a. Calls on Member States to consider a special consumption tax for a limited range of high-end luxury goods as an additional source of public revenue in light of the extraordinary public costs incurred for the containment of the pandemic;
Amendment 127 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system with limits on exemptions and non- standard rates to be introduced
Amendment 128 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system with limits on exemptions and non- standard rates to be introduced with a view to promoting competitiveness; notes that such a simplified VAT system would still benefit from a One-Stop Shop in oder to reduce compliance costs for European companies and boost intra-EU trade;
Amendment 129 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system with limits on exemptions
Amendment 13 #
Motion for a resolution Recital E c (new) E c. whereas the EU's network of anti- fraud experts, Eurofisc, must, in order to be effective, be strengthened and provided with sufficient resources to carry out joint risk analyses, coordinate investigations and cooperate with the European Anti- Fraud Office (OLAF), Europol and the European Public Prosecutor's Office, in particular with a view to investigating VAT fraud; whereas a system of differentiated VAT rates and high compliance costs potentially increase fraud;
Amendment 130 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system
Amendment 131 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system with limits on exemptions and non- standard rates to be introduced with a view to promoting
Amendment 132 #
Motion for a resolution Paragraph 18 18. Calls for the introduction of a simplified VAT system
Amendment 133 #
Motion for a resolution Paragraph 18 18. Calls for a simplified and modernized VAT system with limits on exemptions and non-
Amendment 134 #
Motion for a resolution Paragraph 18 18. Calls for a simplified VAT system, with
Amendment 135 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to the ineffectiveness of enforcement and control measures, particularly those against tax evasion and avoidance and aggressive tax planning; welcomes Transaction Network Analysis (TNA) and supports the establishment of enhanced cooperation between Eurofisc members in order to rapidly detect carousel-type fraud; calls on the Conference on the Future of Europe to address this issue in the context of the protection of the EU's financial interests;
Amendment 136 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to the ineffectiveness of enforcement and control measures, particularly those against tax fraud, evasion and avoidance and aggressive tax planning; calls on the Commission to assess how the introduction and implementation of reverse-charge procedures to combat Missing Trader Intra-Community Fraud can be simplified and made more effective in the EU;
Amendment 137 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to the ineffectiveness of enforcement and control measures, particularly those against tax evasion and avoidance and aggressive tax planning; notes that tax competition and low tax morale also contribute to the VAT gap; observes that low redistributive tax system contributes to a low tax morale;
Amendment 138 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to the ineffectiveness of enforcement and control measures, particularly those against tax evasion and avoidance and aggressive tax planning; calls, in this regard, on Member States to improve administrative cooperation and enhance the performance of national tax authorities;
Amendment 139 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to the ineffectiveness of enforcement and control measures, particularly those against tax evasion and avoidance and aggressive tax planning; stresses that fighting tax fraud and tax evasion should not breach the principle of tax sovereignty and tax competition;
Amendment 14 #
Motion for a resolution Recital E c (new) E c. whereas taxation is primarily the competence of the Member States and is subject to the unanimity requirement within the Council as stated in article 113 of the Treaty on the Functioning of the European Union;
Amendment 140 #
Motion for a resolution Paragraph 19 19. Stresses that the VAT gap is chiefly attributable to legislative loopholes, lack of resources and digital efficiency in tax administrations, the ineffectiveness of enforcement and control measures, particularly those against tax evasion and avoidance and aggressive tax planning;
Amendment 141 #
Motion for a resolution Paragraph 19 a (new) 19a. Considers it necessary to introduce electronic invoicing in all Member States, given that it has proved to be an effective tool for combating fraud and evasion in the countries where it has been introduced, as well as promoting greater simplification and reduced compliance costs;
Amendment 142 #
Motion for a resolution Paragraph 19 a (new) 19 a. Welcomes the launch of the European Tax Observatory created at the initiative of the EP; stresses that the Fiscalis 2021-2027 program is an essential tool to help rapid and constructive cooperation between tax authorities;
Amendment 143 #
Motion for a resolution Paragraph 20 20. Recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools; and that direct tax
Amendment 144 #
Motion for a resolution Paragraph 20 20. Recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools;
Amendment 145 #
Motion for a resolution Paragraph 20 20. Recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools;
Amendment 146 #
Motion for a resolution Paragraph 20 20. Recalls that the effectiveness of reduced rates as a policy tool must always be assessed in the specific context of other existing policy tools; adds that reduced rates are often complementary to existing social and environmental policy tools; and that direct tax incentives are instruments that might better target low-income households and are generally less costly, provided that other conditions are fulfilled;
Amendment 147 #
Motion for a resolution Paragraph 21 21. Stresses the need to move to a definitive VAT system based on the principle of taxation in the country of destination;
Amendment 148 #
Motion for a resolution Paragraph 21 21. Stresses the need to move to a definitive VAT system based on the principle of taxation in the country of destination; calls on the Council to adopt the proposal for a directive of 25 May 2018, without further delay; highlights in this regard the main principles of the prospective definite VAT system for cross- border trade taxation of intra-EU goods supplies at the destination and charging and collecting the VAT within the Member State of destination by the supplier;
Amendment 149 #
Motion for a resolution Paragraph 21 21. Stresses the need to move to a definitive VAT system based on the principle of taxation in the country of destination; calls on the Council to adopt the proposal for a directive of 25 May 2018; Given that Council adoption is lacking to date, technological solutions to address VAT fraud could be considered in the meantime, such as the Transaction Network Analysis (TNA) tool, blockchain and split payment.
Amendment 15 #
Motion for a resolution Recital F F. whereas Opinion No 11/2020 of the Court of Auditors focuses on the new method put forward for calculating the VAT-based own resource; whereas this opinion states that the proposal "significantly simplifies the calculation of the Member States’ VAT-based own resource as compared to the current system" but "identified the risk that the definitive multiannual Weighted Average Rate may not be representative for all Member States";
Amendment 150 #
Motion for a resolution Paragraph 21 21. Stresses the need to move to a definitive VAT system based on the principle of taxation in the country of destination;
Amendment 151 #
Motion for a resolution Paragraph 21 a (new) 21 a. Calls on the Commission to follow- up this report with concrete legislative proposals, addressing the specific topics referred; calls on the Council to value the dialogue and cooperation with the Parliament, pursuing a proper reform of the VAT system, having these proposals in regard and the fundamental need to guarantee a democratic character to the changes on the EU taxation policy;
Amendment 152 #
Motion for a resolution Paragraph 21 a (new) 21 a. Supports the Court of Auditors' proposal to consider the establishment of a mechanism revising the multiannual Weighted Average Rate (WAR) during the period covered by multiannual financial framework in order to avoid distortions in the level of contribution based on the VAT during this period in case of a Member State decides to change its VAT policy;
Amendment 153 #
Motion for a resolution Paragraph 21 a (new) Amendment 154 #
Motion for a resolution Paragraph 21 a (new) 21 a. Notes that there is a considerable VAT collection gap in the e-commerce sector; invites the Commission to study the conclusions of the European Court of Auditors' special report on the matter1a in order to close the collection gap; _________________ 1a Special Report no 12/2019: E- commerce: many of the challenges of collecting VAT and customs duties remain to be resolved
Amendment 155 #
Motion for a resolution Paragraph 21 b (new) 21 b. Recalls the merits of the Taxpayer Identification Number (TIN) as a useful instrument to guarantee compliance and the respect for tax obligations; calls on the Commission and Member States to explore all the possibilities of the TIN as a mechanism to safeguard high standards of efficiency on reporting;
Amendment 156 #
Motion for a resolution Paragraph 21 c (new) 21 c. Supports the idea to expand the scope of the VAT One Stop Shop (OSS) which is in place since 2015 for the declaration and payment of VAT; underlines the need to specifically address the adaptation of the OSS to the increasingly higher dimension of e- commerce;
Amendment 157 #
Motion for a resolution Paragraph 21 d (new) 21 d. Calls on the Commission to assess the current framework and propose concrete legislative proposals on the verification of cross-border transactions, that must be reinforced to secure VAT; underlines, in this regard, the need to specifically address the opportunities that come from the use of new digital technologies, with high standards of data protection and privacy, as corollaries of taxpayers rights;
Amendment 158 #
Motion for a resolution Paragraph 21 e (new) 21 e. Recalls the urgent need to guarantee full transposition and proper implementation of the VAT e-commerce package; calls the Commission to evaluate the state-of-play in this regard and present concrete proposals to adapt the rules, having the circumstances of exponencial growth of e-commerce in consideration;
Amendment 159 #
Motion for a resolution Paragraph 21 f (new) 21 f. Recalls the importance of a closer dialogue with international partners, mainly the most relevant trade partners, regarding VAT; this cooperation bust start and be based on the dimension of administrative cooperation, in order to guarantee an effective logic of exchange of information that can enhance the combate against schemes leading to fraud or evasion;
Amendment 16 #
Motion for a resolution Recital F a (new) F a. whereas the socio-economic crisis caused by the COVID-19 pandemic has required substantial fiscal and budgetary efforts from the governments; that due to the socio-economic effects of the pandemic, VAT revenues will be regressive within the next year;
Amendment 160 #
Motion for a resolution Paragraph 21 g (new) 21 g. Notes the Commission intention to change the nature of the VAT Committee and the objectives regarding a future "comitology committee"; underlines the need to count on the Parliament position on this matter; recalls the need to guarantee full respect for the european institutional framework on taxation and the distribution of competences regarding indirect taxation;
Amendment 17 #
Motion for a resolution Recital F a (new) F a. whereas the VAT-based own resource accounted for 11% of the EU budget in 2019, on a total amount of EUR 17.8 billion;
Amendment 18 #
Motion for a resolution Recital G G. whereas the Commission’s ‘Action Plan for fair and simple taxation supporting the recovery’ is part of the EU’s new strategy for simplifying and adapting taxation to the digitisation of the economy and the green transition, and for combating tax fraud and evasion; whereas this Action Plan identifies matters related to VAT as priorities, focusing on the fight against VAT fraud and the modernisation of VAT on financial services, taking into account the digitalization of the economy;
Amendment 19 #
Motion for a resolution Recital H Amendment 2 #
Motion for a resolution Citation 30 a (new) — having regard to the European Court of Auditor's Special Report no 12/2019: E-commerce: many of the challenges of collecting VAT and customs duties remain to be resolved,
Amendment 20 #
Motion for a resolution Recital H a (new) H a. whereas the VAT, as an indirect tax collected by all 27 Member States, comprehends several different national regimes and that from all of them it is possible to extract good practices and apply on a European-wide reform; whereas national examples should be considered as models to take into account and the European Commission must act as a platform to exchange such good practices; whereas the national legislative changes performed by Portugal, in 2013, creating incentives for consumers to request invoices in hard-to-tax sectors, are one of such good examples;
Amendment 21 #
Motion for a resolution Recital H a (new) H a. whereas the general objective of digitalisation of taxation is key to ensure transparency, accountability and automated reporting, essential for a definitive, simplified and future-proof VAT regime; whereas the COVID-19 pandemic has catalysed the development of digitalisation for all transactions; whereas SMEs are at the centre of such digitalisation process and should be supported in this respect in acquiring the latest technology and know-how;
Amendment 22 #
Motion for a resolution Recital H a (new) H a. whereas parliament works in full respect of the principle of national fiscal and budgetary sovereignty; supports the ambition to find innovative tax solutions, in line with new economic, social and environmental realities;
Amendment 23 #
Motion for a resolution Paragraph 1 1. Observes that on average the standard rate was applied to 71% of the total tax base in the Member States in 2019; that the taxable base at the standard VAT rate varied from 97% (BG) to 47% (ES); that on average, the VAT gap is 10% in the EU but that it varies greatly from Member State to Member State20; that the number of reduced and super-reduced rates varies between Member States;
Amendment 24 #
Motion for a resolution Paragraph 1 a (new) 1 a. Welcomes that the overall trend is positive as the VAT gap declined from 20 % in 2009 to 10 % in 2019 in the EU Member States which suggests that the VAT fraud in the EU is in decline and consequently VAT revenues to GDP are on the rise;
Amendment 25 #
Motion for a resolution Paragraph 1 a (new) 1 a. Calls on the European Commission and Member States to analyse and exchange the best practice in those Member States that succeed in avoiding a large VAT gap;
Amendment 26 #
Motion for a resolution Paragraph 2 2. Notes that simplifying VAT with the introduction of a single rate and revenue neutrality could reduce the standard rate in the EU by an average of 7
Amendment 27 #
Motion for a resolution Paragraph 2 2. Notes that
Amendment 28 #
Motion for a resolution Paragraph 2 2. Notes that simplifying VAT with the introduction of a single rate and revenue neutrality could
Amendment 29 #
Motion for a resolution Paragraph 2 2. Notes that simplifying VAT with the introduction of a single rate and revenue neutrality could reduce the standard rate in the EU-27 by an average of 7
Amendment 3 #
Motion for a resolution Recital A A. whereas in 1977 the Council adopted a sixth VAT directive with a view to achieving a uniform tax base under which harmonised rates were to be set out; whereas, at the time, all Member States have already adopted a system of value added tax in accordance with the first and second Council Directives of 11 April 1967 on the harmonization of the laws of the Member States relating to turnover taxes; whereas the Member States decided to apply a transitional period in which to achieve this, which has since been
Amendment 30 #
Motion for a resolution Paragraph 2 2. Notes that simplifying VAT with
Amendment 31 #
Motion for a resolution Paragraph 2 2. Notes that simplifying VAT
Amendment 32 #
Motion for a resolution Paragraph 3 3. Takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system, facilitates fraud and increases compliance costs; notes, however, that the reduced rates can be used to pursue important objectives, mainly on access to basic necessity goods; understands that the application of reduced rates must lead to a decrease on the price to the consumer;
Amendment 33 #
Motion for a resolution Paragraph 3 3. Takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system, facilitates fraud and increases compliance costs; notes that, instead of striving for reduced rates for environmentally friendly products or services, applying a uniform standard VAT rate with mark-ups for high-polluting goods and services should be considered;
Amendment 34 #
Motion for a resolution Paragraph 3 3. Takes the view that applying a multitude of reduced rates has a legitimate purpose in society, notably to reduce the regressiveness of the VAT system and helping achieve certain national policy objectives, but it also aggravates the complexity and opacity of the tax system,
Amendment 35 #
Motion for a resolution Paragraph 3 3. Takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system, facilitates fraud and increases compliance costs; stresses that tax competition is the main mechanism helping Member States to identify and close the loopholes and shortcomings responsible for tax evasion;
Amendment 36 #
Motion for a resolution Paragraph 3 3. Takes the view that applying a multitude of reduced rates aggravates the complexity and opacity of the tax system, facilitates fraud and increases compliance costs; stresses, however, that any measure of simplification should not lead to higher VAT rates;
Amendment 37 #
Motion for a resolution Paragraph 3 3. Takes the view that
Amendment 38 #
Motion for a resolution Paragraph 3 3. Takes the view that
Amendment 39 #
Motion for a resolution Paragraph 3 a (new) 3 a. Notes the amplitude of different standard rates between the Member States and the complexity that it brings to the system, although justified by different national economic systems; underlines that this complexity is aggravated by the different application of reduced rates that are legitimate to pursue social and environmental objectives; recalls that the possibility to apply super reduced rates (in 5 Member States) and parking rates (in 5 Member States) constitutes an additional obstacle to a coherent and fully interoperable common system;
Amendment 4 #
Motion for a resolution Recital B B. whereas the VAT Directive18 has recast and repealed the Sixth Directive, for the purposes of greater clarification; whereas this directive provides for the transitional rules to be replaced by a definitive system based on taxation in the Member State of origin; whereas the transitional system is complex, flawed and
Amendment 40 #
Motion for a resolution Paragraph 3 b (new) 3 b. Understands that the increasingly higher complexity of the system is motivated by te multiple rates, but mainly by the exemptions and derogations, that must be admitted as a exception; recalls the specific situation of unequal treatment of Member States pre and post 1992, to which different rules apply; calls on the Commission to address this issue in future legislative proposals;
Amendment 41 #
Motion for a resolution Paragraph 3 c (new) 3 c. Notes that, over the past two decades, the Commission has launched almost 200 infringement procedures; calls on the Commission to present a summary of the main findings of these procedures to prepare future legislative proposals, namely on reduced rates, exemptions and non-transposition;
Amendment 42 #
Motion for a resolution Paragraph 3 d (new) 3 d. Notes that the coronavirus pandemic justified VAT-related exception rules, that prove the need for a degree of flexibility to face urgent or unexpected circumstances; urges the Commission to take this into account on future legislative proposals regarding VAT;
Amendment 43 #
Motion for a resolution Paragraph 4 4. Observes that the VAT gap fluctuates in line with the business cycle, and that low tax compliance is
Amendment 44 #
Motion for a resolution Paragraph 4 4. Observes that the VAT gap fluctuates in line with the business cycle,
Amendment 45 #
Motion for a resolution Paragraph 4 a (new) 4 a. Notes with concern that some Member States do not generally exempt in kind donations from VAT, leading businesses to destroy consumer goods, notably returns, rather than donating them to charitable causes, even though such an exemption is possible under the existing VAT Directive; calls on the Commission to issue guidance to Member States, clarifying that VAT exemptions for in kind donations are compatible with the existing Union law on VAT until Council proposal 2018 (COM(2018) 20 final, Article 98.2) is adopted by Member States;
Amendment 46 #
Motion for a resolution Paragraph 4 a (new) 4 a. Regrets the lack of available data on regional differences being possibly a major limitation for measuring the VAT gap; calls on the Commission to check whether producing regional VAT gap measurements publicly could be a valuable tool improving transparency and reducing the VAT gap;
Amendment 47 #
Motion for a resolution Paragraph 5 5. Takes the view that the current diversity of reduced rates imposes
Amendment 48 #
Motion for a resolution Paragraph 5 5. Takes the view that the current diversity of reduced rates imposes particularly high compliance costs on businesses; and that compliance costs are estimated to be an average of 2.5% of company turnover and vary considerably from Member State to Member State22
Amendment 49 #
Motion for a resolution Paragraph 6 6. Observes that SMEs must pay proportionately higher compliance costs, as these costs are fixed and independent of company size, and that high compliance costs constitute a barrier to entry into the EU internal market; takes the view, therefore, that differentiated VAT regimes within the EU
Amendment 5 #
Motion for a resolution Recital B a (new) B a. whereas tax collection is primarily responsibility of each Member State;
Amendment 50 #
Motion for a resolution Paragraph 6 6. Observes that SMEs must pay proportionately higher total enterprise tax compliance costs, as these costs are fixed and independent of company size, and that high compliance costs constitute a barrier to entry into the EU internal market;
Amendment 51 #
Motion for a resolution Paragraph 6 6. Observes that SMEs
Amendment 52 #
Motion for a resolution Paragraph 6 6. Observes that SMEs must pay
Amendment 53 #
Motion for a resolution Paragraph 7 7. Notes digitalisation’s potential to reduce compliance costs in the long term; maintains that digital innovations23 are likely to reduce compliance costs and help increase the transparency of commercial transactions; stresses the need to ensure data security and individual
Amendment 54 #
7. Notes digitalisation’s potential to reduce compliance costs; maintains that digital innovations23 are likely to reduce compliance costs and help increase the transparency of commercial transactions; stresses the need to ensure data security and individual and corporate privacy; looks forward to the legislative proposal for modernising VAT reporting obligations and calls on the Commission to come up with less red-tape focusing on easy application by traders; _________________ 23Such as AI, big data and blockchain technology.
Amendment 55 #
Motion for a resolution Paragraph 7 7. Notes digitalisation’s potential to reduce compliance costs; maintains that digital innovations23 are likely to reduce compliance costs and help increase the transparency of commercial transactions and fight VAT fraud; stresses the need to ensure data security and individual and corporate privacy; highlights the potential of Distributed Ledger Technology (DLT) to prevent VAT fraud as, e.g. Missing Trader Intra-Community Fraud; _________________ 23Such as AI, big data and blockchain technology.
Amendment 56 #
Motion for a resolution Paragraph 7 7. Notes digitalisation’s potential to reduce compliance costs; maintains that digital innovations23 are likely to reduce compliance costs
Amendment 57 #
Motion for a resolution Paragraph 7 a (new) 7 a. In order to facilitate trade and increase legal certainty in the single market, the Commission, in cooperation with Member States, should establish a Union VAT Web information portal for businesses. That portal should provide quick, up-to-date and accurate access to relevant information about the implementation of the VAT system in the different Member States and in particular on the correct VAT-rates for different goods and services in the different Member States, as well as the conditions for zero-rate; Such a portal may also help to address the current VAT gap;
Amendment 58 #
Motion for a resolution Paragraph 7 a (new) 7 a. Points to the Union One-Stop Shop as an example for digital innovation allowing European businesses to simplify VAT obligations and thus compliance costs in the area of e-commerce sales within the EU; notes that such a reduction in compliance costs is particularly beneficial for small and medium enterprises; calls on the European Commission to explore how to expand the scope of the OSS;
Amendment 59 #
Motion for a resolution Paragraph 7 a (new) 7 a. Calls on Member States to increase and improve cooperation between themselves and apply thoroughly the set of rules on the exchange of VAT payment data to facilitate detection of tax fraud in cross-border e-commerce transactions adopted in February 2020;
Amendment 6 #
Motion for a resolution Recital C C. whereas in 2013 a major overhaul was initiated to introduce a definitive system based on the destination principle, which makes it less vulnerable to fraud19 ; whereas the destination principle implies that VAT is levied on the Member State of the final consumption and this must lead to tax neutrality; _________________ 19 As outlined in the EU Action Plan on VAT of 7 April 2016.
Amendment 60 #
Motion for a resolution Paragraph 7 b (new) 7 b. Notes that Member States are already employing new technologies to improve the efficiency of domestic purchases control for tax matter; understands that these national measures must be taken into account in any VAT system reform, as good practices to be considered; stands for more coordination between Member States in this regard, in order to facilitate cross-border transactions, without excessive costs for operators and consumers; welcomes the Commission intention to present a legislative proposal for modernising VAT reporting obligations; calls on the Commission to present concrete proposals to promote a quicker system of exchange of information on VAT intra-EU transactions and to make it interoperable with national mechanisms; stands for the expansion of e-invoicing;
Amendment 61 #
Motion for a resolution Paragraph 7 c (new) 7 c. Underlines the urgency to tackle the VAT cross-border fraud and the carousel fraud, with the proper implementation of efficient exchange of information mechanisms and the adequate means (both human, financial, technical and technological) for authorities such as OLAF; stresses the valuable contribution of organisms like Eurofisc; recalls the role of payment services providers and the need to guarantee high standards of reporting on VAT;
Amendment 62 #
Motion for a resolution Paragraph 8 8. Observes that the wide variety of rates may cause
Amendment 63 #
Motion for a resolution Paragraph 8 8. Observes that the wide variety of rates causes price distortion in the internal market, creating incentives for cross-border
Amendment 64 #
Motion for a resolution Paragraph 8 8. Observes that the wide variety of rates can cause
Amendment 65 #
Motion for a resolution Paragraph 8 8. Observes that the wide variety of rates causes price distortion in the internal market, creating incentives for cross-border purchases
Amendment 66 #
Motion for a resolution Paragraph 8 a (new) 8 a. Welcomes the positive trend of reducing the compliance costs due to continuing digitization of businesses and public administration; notes that in OECD countries the time necessary for tax compliance fell between 2006 and 2020 from 230 hours to 162 hours, mainly due to the adoption of electronic filing and payment systems23a; _________________ 23a PWC, Paying Taxes 2020, page 27
Amendment 67 #
Motion for a resolution Paragraph 9 9. Stresses that a
Amendment 68 #
Motion for a resolution Paragraph 9 9. Stresses that a well-designed VAT system is neutral and should not affect trade, but that in practice this principle is difficult to verify at global level given the application of VAT exemptions, the ineffectiveness of refund systems, the wide variety of rates – incurring higher compliance costs – and the fact that VAT has superseded income taxes with a view to encouraging trade; stresses that an increasing number of SMEs are willing to trade across the EU, especially through online transactions, and that the EU VAT system should aim at facilitating such cross-border growth;
Amendment 69 #
Motion for a resolution Paragraph 9 9.
Amendment 7 #
Motion for a resolution Recital D D. whereas on 25 May 2018 a proposal for a directive was adopted which introduced detailed arrangements for a definitive VAT regime for intra-EU business-to-business trade in goods and put an end to the ‘transitional’ system; whereas Parliament adopted its position on 12 February 2019; whereas the Council has not yet adopted a position; whereas this decision blockade delays important decisions on adapting the VAT for the challenges we face in the framework of the European economy recovery; and that the absence of action leads to the maintenance of the loopholes that allow the VAT gap to grow;
Amendment 70 #
Motion for a resolution Paragraph 9 9. Stresses that a well-designed VAT system is neutral and should not affect trade, but that in practice this principle is difficult to verify at global level given the application of VAT exemptions, the ineffectiveness of refund systems, the wide variety of rates – incurring higher compliance costs
Amendment 71 #
Motion for a resolution Paragraph 9 a (new) 9 a. Notes in comparison to EU27 that among 50 federal states of the USA there are over 11,000 standard sales tax jurisdictions with a distinct aggregate sales tax rate based on a unique combination of factors, including sales taxes levied by taxing authorities at the state, county, city, and district levels23b; _________________ 23bhttps://taxfoundation.org/state-sales- tax-jurisdictions-in-the-us-2020/
Amendment 72 #
Motion for a resolution Paragraph 9 a (new) 9 a. Considers whether the non- neutrality of the VAT system could also be used to the benefit of macroeconomic coherence and cooperation in the EU; calls on the Commission to assess how reduced VAT rates could be applied to address intra-Community trade imbalances;
Amendment 73 #
Motion for a resolution Paragraph 9 a (new) 9 a. Notes that empirical evidence shows that the current system of multiple VAT rates is regressive in EU Member States when measured as a percentage of disposable income, but tends to be proportional or slightly progressive in most EU Member States when measured as a percentage of expenditure; notes further that, inparticular, when measured in terms of expenditure, existing reduced and zero VAT rates thereby help to make VAT more progressive compared to single rate VAT systems; notes in addition that evidence also shows that only VAT rates which were reduced with the aim of supporting low-income households (such as reduced rates on food) make the VAT more progressive;
Amendment 74 #
Motion for a resolution Paragraph 10 Amendment 75 #
Motion for a resolution Paragraph 10 10. Observes that the application of reduced rates does not systematically give rise to permanent price reductions for the consumer; that the effectiveness of a reduced rate depends on a number of factors, such as the extent to which businesses pass it on to consumers, its duration over time, the size of the reduction and the complexity of the rate system; that the passing-on of reductions in their entirety is therefore a
Amendment 76 #
Motion for a resolution Paragraph 10 10. Observes that
Amendment 77 #
Motion for a resolution Paragraph 10 10. Observes
Amendment 78 #
Motion for a resolution Paragraph 10 10. Observes that the application of reduced rates does not systematically give rise to permanent price reductions for the consumer; that the effectiveness of a reduced rate depends on a number of factors, such as the extent to which
Amendment 79 #
Motion for a resolution Paragraph 10 10. Observes that the application of reduced rates does not systematically give rise to permanent price reductions for the consumer; that the effectiveness of a reduced rate depends on a number of factors, such as the extent to which businesses pass it on to consumers, its duration over time, the size of the reduction and the complexity of the rate system; that the passing-on of reductions
Amendment 8 #
Motion for a resolution Recital E E. whereas the VAT gap in the EU has been reduced from 20% in 2009 to 10% in 2019, according to fast estimates that indicates that the gap could fall below EUR 130 billion; whereas owing to the pandemic and its socio-economic effects, this trend was reversed in 2020; whereas estimated losses of EUR 164 billion have been incurred, of which one third has fallen into the hands of fraudsters and organised crime networks; whereas this losses can represent a VAT gap of 13.7%; whereas this scenario demands policy strategic options;
Amendment 80 #
Motion for a resolution Paragraph 10 a (new) 10 a. Highlights that reduced rates normally pursue the legitimate purpose of ensuring that essential goods are accessible to everyone; stresses that reduced VAT rates on necessities (e.g. food) tend to make VAT more progressive and should only apply to products which bring social, environmental or cultural benefits; stresses that reduced rates can be particular important in societies with great income disparities and high level of social and economic inequality;
Amendment 81 #
Motion for a resolution Paragraph 10 a (new) 10 a. Is deeply concerned about the regressive nature of consumption taxes; stresses that VAT should be kept at low rates as it burdens lower income households disproportionately, exacerbating the inequality in the distribution of wealth;
Amendment 82 #
Motion for a resolution Paragraph 10 b (new) 10 b. Rejects strongly tax reforms that replace progressive taxation with regressive taxation, e.g. reducing income tax rates for top earners or corporate taxes, while increasing VAT; warns against the regressive distributional consequences of such reform efforts; stresses that, in general, an equitable, inclusive and well-designed public revenue system is based on progressive taxation with high rates and low-rated consumption taxes;
Amendment 83 #
Motion for a resolution Paragraph 10 c (new) 10 c. Stresses that efforts to simplify or harmonise the VAT system in the EU must not lead to higher standard or non- standard VAT rates; warns that higher VAT rates do not only aggravate distributional inequality but do also affect aggregate demand negatively and therefore, potentially, employment and economic growth;
Amendment 84 #
Motion for a resolution Paragraph 11 Amendment 85 #
Motion for a resolution Paragraph 11 11. Recalls that for it to have a leverage effect, green taxation must be inclusive, strive for social equity and not undermine businesses’ international competitiveness;
Amendment 86 #
Motion for a resolution Paragraph 11 11.
Amendment 87 #
Motion for a resolution Paragraph 11 11. Recalls that for it to have a leverage effect, green taxation must be inclusive
Amendment 88 #
Motion for a resolution Paragraph 11 11. Recalls that for it to have a leverage effect, green taxation must
Amendment 89 #
Motion for a resolution Paragraph 11 11. Recalls that for it to have a leverage effect, green taxation must be inclusive, fair and strive for social equity and not undermine businesses’ international competitiveness; observes that the effectiveness of reduced rates in promoting this type of goods and services or, in a broader sense, merit goods (e.g. culture, health, biodiversity) is chiefly a function of the extent to which they are used to promote such goods;
Amendment 9 #
Motion for a resolution Recital E a (new) E a. whereas according to the 2020 Final Report in the context of the ‘Study and Reports on the VAT Gap in the EU- 28 Member States' prepared for the Commission, the VAT gap in Member States varied from less than 1% in Sweden and Croatia to more than 33% in Romania;
Amendment 90 #
Motion for a resolution Paragraph 11 a (new) 11 a. Stresses in this regard that reduced rates shall be applied always in fiscally responsible manner, without sacrificing the sustainability of public finances;
Amendment 91 #
Motion for a resolution Paragraph 12 Amendment 92 #
Motion for a resolution Paragraph 12 Amendment 93 #
Motion for a resolution Paragraph 12 Amendment 94 #
Motion for a resolution Paragraph 12 Amendment 95 #
Motion for a resolution Paragraph 12 12. Stresses that evidence suggests that reduced VAT rates are
Amendment 96 #
Motion for a resolution Paragraph 12 12. Stresses that reduced rates are not
Amendment 97 #
Motion for a resolution Paragraph 12 12. Stresses that reduced rates are
Amendment 98 #
Motion for a resolution Paragraph 13 Amendment 99 #
Motion for a resolution Paragraph 13 13. Takes the view that direct tax incentives, such as
source: 697.828
|
History
(these mark the time of scraping, not the official date of the change)
2022-02-12Show (1) Changes | Timetravel
| forecasts/1 |
|
2022-02-02Show (1) Changes | Timetravel
| forecasts/0/title |
Old
Indicative plenary sitting dateNew
Debate in plenary scheduled |
2022-01-15Show (3) Changes | Timetravel
| docs/2 |
|
| events/2/summary |
|
| forecasts/0/date |
Old
2022-01-17T00:00:00New
2022-02-14T00:00:00 |
2022-01-06Show (2) Changes | Timetravel
| docs/2 |
|
| events/2/docs |
|
2021-12-22Show (2) Changes
| events/2 |
|
| procedure/stage_reached |
Old
Awaiting committee decisionNew
Awaiting Parliament's vote |